The Darkness Before Dawn: When Will the Consolidation End? What Will the Market Do in the Future?

特邀专栏作者

2024-06-20 21:00 (UTC+8)

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When will the consolidation end? "The darkness before dawn, the reaccumulation in the middle of the cycle, and the emergence of the cycle high."

AI Summary

When will the consolidation end? "The darkness before dawn, the reaccumulation in the middle of the cycle, and the emergence of the cycle high."

Original author: Crypto, Distilled

Original translation: TechFlow

When will the consolidation end? Despite the general pessimism and anger, $BTC is only 15% below its high. Famous trader @BobLoukas offers hope:

"The darkness before dawn, mid-cycle reaccumulation, and the emergence of cycle highs"

Here are his main points.

Monthly chart:

We reached the all-time high of the previous cycle in month 16, while the previous cycle took more than two years. We are now in the third month of sideways trading.

Historically, $BTC has paused after reaching its all-time high before reaching its final cycle peak. A longer period of sideways movement means the next rally will be healthier and stronger.

Weekly chart:

It is now in a 14-week consolidation following the ETF news, down 12% from its highs. This volatility is expected after the rally that nearly doubled from its recent lows in January 2024.

Notably, the 7-week cycle low was $38,000 in January (where the price doubled).

Why didn’t the market go higher?

Bob points out several key factors:

Whales from the previous cycle sold near $60,000
Concerns about potential monthly doubling top
GBTC outflows (selling pressure)
Transfer from on-chain assets to ETF assets
ETF expectations are priced in early
The 2023 Q4 rally was driven by ETF hype

When will the shock end?

Stay patient, it has risen 3 times since September 2023 and needs to pull back to accumulate momentum.

Similar to the doubling post-cycle low in the first quarter of 2023, a broad base formation preceded the fourth quarter’s uptick.

The volatility may continue until July or August, completing the bottoming process.

When might the market peak?

Based on the 4-year cycle, the peak may still be far away.

Past cycles have typically taken 33-35 months from low to high.

According to this model, October 2025 is possible (16-17 months away).

The large gap between the 10-month moving average and price suggests that a pullback may be needed.

Why is everyone so angry?

Bob explained that this bull market feels tough for a lot of people:

Chasing speculative altcoins (competition among investors is fierce).
Like the previous cycles, wait for a 30-35% drop and buy at the highs after missing out.

Possible trends

We may see the next local bottom soon, possibly towards the end of the month.

Bullish signs include higher lows and well above the January 2024 low, showing strength in the market.

After this local bottom, one scenario is to sweep it and retake the highs.

The second possible scenario is a continuation of the volatile price trend.

This phase may last until September, forming a local bottom but not breaking through the historical highs.

The third possibility is another 30% drop, which has been typical in past bull markets. Similar to 2017, but now with ETFs, which is an important difference.

Some people think that it is impossible to reach around $55,000 with ETFs, Bob strongly disagrees.

Trend Convergence

All three trends converge around October, November, and December 2024, with the goal of breaking out of the all-time high and rising further. During this period, Bitcoin's performance could significantly affect the ROI of altcoins.

Emotional reset:

Bob believes that the restart of market sentiment after the surge in April is positive. On-chain data shows that coins are shifting to long-term holders. As new holders accumulate in the higher range, a solid foundation is formed. Dips may be buying opportunities.

Bob's Buying Strategy

Bob last bought near the cycle lows around $17,000. Now, he is eyeing potential buying opportunities in the $BTC range below $50,000. He suggests that those who are under-positioned can consider adding to their positions during this volatility.